UK bank Lloyds buys rival HBOS

Britain's biggest home loan lender had lost more than half its value in the past six days.

18 Sep 2008 07:16 GMT

HBOS is Britain's biggest home loan lender [AFP]

HBOS, Britain's biggest home loan lender, lost more than two-thirds of its value in the six days from September 9 to Wednesday - its shares crashed from 308.5 pence to an all-time low of 88p.

Government support

News of the buyout talks sent HBOS shares surging higher after the heavy losses in earlier trade prompted Britain's Financial Services Authority to issue a statement saying that the group was well funded.

The British government smoothed out any competition concerns about the tie-up between Lloyds, Britain's fifth-biggest bank, and HBOS, ranked sixth, on the grounds that the merger would promote financial stability.

The FTSE 100 London stock exchange closed down 113.2 points at 4,912.4 having reached a low of 4,903.3 and a high of 5,124.4 in a volatile day of trading on Wednesday.

Barclays, another British bank, had given Wall Street a small boost on Tuesday by agreeing to buy the investment arm of Lehman Brothers, the US bank which went bankrupt on Monday, for $1.75bn and taking on its 10,000 staff.